Meralco drops bid on Malampaya gas

by Alena Mae S. Flores – December 25, 2015 at 11:30 pm

from Manila Standard

Meralco PowerGen Corp., a unit of retailer Manila Electric Co., has lost interest in the Malampaya banked gas sale due to the limited time to put up power facility that will utilize the fuel.

“We were very interested during that time… But from when to start drawing the banked gas, we wouldn’t have enough time to build a small facility,” Meralco president Oscar Reyes said.

Meralco PowerGen earlier expressed interest in joining the sale of the banked gas from the Malampaya field in northwest Palawan.

The banked gas is estimated to fuel a 400-megawatt power plant. The government is conducting a joint tender for the banked gas, or reserves, of PNOC Exploration Corp. and Shell Philippines Exploration Corp..

The banked gas, according to an invitation bulletin, is to be delivered

in the first quarter next year. The invitation said Spex, Chevron Malampaya LLC, PNOC Exploration as sellers were jointly tendering their respective gas volume entitlements under service contract 38 in northwest Palawan.

The quantity of gas available is up to 227.995 petajoules and an average daily quantity of up to 78.1 terajoules… was “available for delivery as early as January 1, 2016 and up to February 23, 2024.”

Meralco PowerGen attended the pre-qualification conference of the joint sale but did not submit a bid.

“It’s an industry that need to be carefully study,” Meralco chairman Manuel Pangilinan said earlier.

Meralco PowerGen has long expressed interest in putting up natural gas power projects in the country, including liquefied natural gas.

The company is in talks with Osaka Gas of Japan for a possible joint venture for an LNG in Luzon but no firm commitment was made to date.

Meralco PowerGen is looking at up to 3,000 MW of power generation capacity in the next five years, with the bulk to be provided by coal.

The company is set to start next year the construction of three coal-fired power plants with a combined capacity of up to 2,255 megawatts.

The projects include the 455-MW plant of San Buenaventura Power Ltd. in Quezon province, 600 MW by Redondo Peninsula Energy Inc. in Subic and 1,200- MW Atimonan One Energy also in Quezon.

“Participation in power generation is highly strategic for Meralco. Without any generating capacity, Meralco would effectively be only a price-taker and a supply-taker. We look forward to building a portfolio of highly fuel efficient, highly reliable power generating facilities of up to 3,000 MW in joint venture with strategic partners,” Reyes earlier said.

The San Buenaventura coal project is a joint venture between Meralco PowerGen and New Growth B.V., a unit of The Electricity Generating Public Co. Ltd. of Thailand.

San Buenaventura, in which MGen has a significant interest, has started work on plant site preparation before proceeding to a financial closing and the actual construction job.